Mainstreet Health Investments Buys 12-Property Portfolio in U.S., Canada for $152M

by Jeff Shaw

TORONTO — Maintreet Health Investments (MHI) has announced the acquisition of seven seniors housing communities and five development properties in the United States and Canada for $152 million.

MHI is the Toronto-based seniors housing investment arm of Mainstreet, a skilled nursing developer based in Indiana. The property acquisitions include 739 total beds.

The first part of the portfolio includes four skilled nursing facilities from Mainstreet Property Group (MPG) for $92.8 million, each of which features 70 skilled nursing beds and 24 assisted living suites. Those properties include: The Healthcare Resort of Leawood, Leawood, Kan.; The Healthcare Resort of Houston, Houston, Texas; The Healthcare Resort of Wichita, Wichita, Kan.; and The Healthcare Resort of Fort Worth, Fort Worth, Texas. MHI will immediately lease all four facilities to The Ensign Group.

The second part of the acquisition is a single skilled nursing and memory care facility — the 158-bed Symphony of Evanston in Evanston, Ill. — for $22.9 million. The seller is Symphony Post-Acute Network, which will continue to operate the facility.

MHI also purchased 50 percent interest in two Autumnwood Lifestyles-owned and –operated assisted living communities in Ontario for $19.8 million. The properties are Red Oak Retirement Villa (84 units) in Sudbury and Marina Point (121 units) in North Bay.

Lastly, MHI acquired four mezzanine loans from Welltower for $13.1 million. MHI also extended an additional mezzanine loan totaling $3.5 million to the borrower, Mainstreet Property Group.

The loans are secured by five development projects MPG is currently building in Colorado, Arizona and Nebraska. When construction is completed, those projects will total 430 skilled nursing beds and 24 assisted living units. Estimated completion dates for the projects range from March to December 2017.

“The acquisitions complement MHI’s existing portfolio by adding high-quality properties in attractive markets within the United States and Canada,” according to a press release from the company. “In addition, the mezzanine investments will provide the company with purchase options to acquire the development projects upon completion, adding to Mainstreet’s growth pipeline.”

MHI estimates the acquisitions will increase its total portfolio value from $450 million to $600 million. The combined capitalization rate of the entire portfolio is 7.7 percent. The company also cites increased geographic, property-type and tenant diversification as reasons for the acquisitions. Although the company is based in Toronto, the Autumnwood properties will be its first Canadian assets.

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